Samsung Electronics Co. is anticipated to launch an equity buyback that targets non-voting preferred shares, narrowing a steep discount and setting a precedent for other Korean giants. More than 100 South Korean companies, including Hyundai Motor Co. and LG Chem Ltd., have issued preferred shares to raise capital without diluting founding families' voting power. These securities pay a small dividend premium but trade at an average of a 45% discount, signaling capital misallocation according to Sachin Mistry of Palliser Capital.

Market watchers expect Samsung to target its discounted preferred stock, which would save money and help sidestep rules forcing affiliates to sell holdings. Last month, Samsung announced a shareholder-return program spending up to 110 trillion won ($81.8 billion), one of the largest ever worldwide. While buyback specifics were not detailed, there is a 26% gap between preferred and common equity—the widest in over a decade.

Hyundai Motor also announced in August a buyback program including preferred shares, where its common shares' premium over preferreds currently exceeds 50%. Through buybacks, Samsung would boost per-share value, helping chip away at the "Korea Discount." Investors expect these actions may trigger a broader re-rating of preferred shares as Seoul advances governance reform. "As Korea continues to open its market to international investors, we expect that the discount will narrow," said Molly Pieroni of Yacktman Asset Management.